Club Cruise Entertainment and Travelling Services Europe BV v The Department for Transport

A detention notice under the Merchant Shipping Act 1995 is not retrospectively validated by reliance on a statutory power which the detaining officer did not purport to exercise. However, defects in the notice do not invalidate an otherwise valid detention where Parliament intended the statutory purpose to prevail over form. The statutory test for a dangerously unsafe ship requires more than proof that the ship was unsafe or posed a risk to health; the circumstances must make the ship dangerously unsafe. A person who is not in possession of goods commits conversion only by dealing with them in a way that absolutely denies the owner's rights or asserts a right inconsistent with ownership. A temporary statutory restraint on use, without an assumption of ownership or dominion, is insufficient.

The claimant, disponent owner of the cruise ship Van Gogh, challenged the detention of the vessel by an officer of the Maritime and Coastguard Agency after outbreaks of norovirus on two preceding cruises. The vessel was detained under a notice referring generally to merchant shipping legislation and was released two days later.

The trial concerned preliminary issues ordered by Aikens J. They included whether the notice validly invoked the Merchant Shipping Act 1995 or the Merchant Shipping and Fishing Vessels (Health and Safety at Work) Regulations 1997; whether the assumed facts could constitute reasonable grounds for detention as a dangerously unsafe ship; whether the detention amounted to conversion; and whether the court could award statutory compensation under section 97.

1. Regulatory basis of detention. On the assumed evidence, the officer was intending to act under sections 94 and 95 of the Merchant Shipping Act 1995, not regulation 28 of the 1997 Regulations. A detention cannot be retrospectively justified under a regulation which the officer neither had in mind nor purported to exercise. The reference to the 1995 Act was nevertheless sufficient to encompass powers under regulations made pursuant to that Act. (paras [19]-[29])
2. Defects in notices. The approach in R v Soneji [2006] 1 AC 340, following London & Clydeside Estates Ltd v Aberdeen District Council [1980] 1 WLR 182, required attention to the consequences of non-compliance and the statutory purpose. Parliament could not have intended that defects in a detention notice would invalidate an otherwise valid safety detention. Issue 1 was therefore answered in the negative. (paras [30]-[34])
3. Dangerously unsafe ship. The inspector had to possess reasonable grounds for the opinion that the ship was dangerously unsafe. The assumed facts were capable of establishing that the ship was unsafe under regulations 5 and 28, but did not, without more, establish that it was dangerously unsafe under sections 94 and 95. The answer to issue 3(b) was therefore no. (paras [35]-[38])
4. Conversion. The court applied the established distinction between interference by a person in possession and interference by a person out of possession. The detention notice did not deny absolutely the claimant's rights, assert ownership or dominion, or make a sufficiently extensive encroachment on possession. It was a temporary restriction on use and therefore did not constitute conversion. The reasoning in Kuwait Airways Corporation v Iraqi Airways Co [2002] 2 AC 883 was consistent with the earlier authorities. (paras [39]-[55])
5. Statutory compensation. Sections 96 and 97 confer the power to award statutory compensation on an arbitrator appointed under section 96, not on the court. The court retained jurisdiction to award common-law damages where a cause of action existed, but had no equivalent statutory power in the absence of such a cause of action. Issue 5 was answered no. (para [56])

This was a first-instance trial of preliminary issues ordered by Aikens J on 27 June 2008. No appellate decision is stated in the judgment.